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Britain will not be able to enjoy all the benefits of the single market or "frictionless" trade with the rest of the European Union after Brexit, its chief negotiator has warned.

Michel Barnier told an EU committee in Brussels: "I have heard some people in the UK argue that one can leave the single market and keep all of its benefits - that is not possible."

"I have heard some people in the UK argue that one can leave the single market and build a customs union to achieve 'frictionless trade' that is not possible," he added.

Mr Barnier also said that there will be "negative" consequences for the UK which will result from the decision to leave EU and not from any attempt to "punish" the UK.

The former French minister also said Brexit would create a "loser/loser situation" for both the EU and UK, which would be worsened if the two sides failed to agree an agreement.

He also suggested that the UK has "more to lose" than the remaining 27 member states.

Formal discussions on Britain's withdrawal from the EU are in progress. Credit: PA

Mr Barnier also said that there was "no reasonable justification" for Britain to exit the EU without a deal.

"No deal would worsen the loser/loser situation which will necessarily be the result of Brexit and objectively the UK would have rather more to lose than its partners."

His comments are a stark contrast of the negotiating position set out by Prime Minister Theresa May, who has said she wants trade with the remaining EU to be "as frictionless as possible".

Mrs May has also said previously that "no deal is better than a bad deal".

Brexit Secretary David Davis has also said he hopes a new trade deal will deliver the "exact same benefits" as single market membership.

Theresa May has previously said 'no deal is better than a bad deal'. Credit: PA

Speaking to the European Economic and Social Committee, Mr Barnier also said it had been made clear to the UK that the EU's "four freedoms" - free movement of goods, capital, services, and labour - are indivisible.

He added that there can be no sector-by-sector participation in the single market and that the EU will maintain full sovereignty over its own rules and regulations.

"These three points were already made very clear by the European Council and European Parliament, but I am not sure whether they have been fully understood across the Channel," said Mr Barnier.

"The decision to leave the EU has consequences and I have to explain to citizens, businesses and civil society on both sides of the Channel what those consequences mean for them."

Downing Street said the Government did understand the EU's position and was focused on "getting a deal that works for both sides".

The Prime Minister's spokesman said: "Obviously we are just at the beginning of the negotiations but I would say that the most frictionless possible trade between the UK and the EU is clearly in the interests of both sides."